Hodge Jones & Allen pioneers fixed-fee divorce arbitration service

Hodge Jones & Allen (HJA) has launched the first fixed-fee arbitration service for divorcing couples and separating cohabitees. The service will slash the cost associated with agreeing a financial settlement, providing a speedier alternative to court proceedings whilst ensuring a legally binding agreement.

Court proceedings can cost those involved in reaching a financial settlement as much as fifty thousand pounds in legal fees but the arbitration service fee will be a fraction of this. In addition, those using the service can expect to reduce the amount of time taken to reach a settlement from around a year to only four months.

At present the experience of the average separating couple trying to agree a financial settlement through the family courts is costly, overly adversarial and subject to big delays. For middle income families where the value of their property is likely to be their biggest asset, this leads either to financial hardship or an avoidance of the judicial process altogether resulting in unsatisfactory financial settlements.

The certainty of outcome and procedural flexibility of the arbitration service makes it easier to minimise the amount of legal work needed and to agree a timetable for the entire process from the outset. It is recognised that legal fees can run out of control in reaching a financial agreement in divorce cases, with letters going back and forth. Recently a judge went as far as to criticise the “appalling profligacy” of legal expenditure in a case involving the breakdown of a 20-year relationship which had run to £1.3million in fees despite the amount in dispute being closer to £500,000. With fixed-fee arbitration both solicitors are acting on the same fee so there is no incentive to engage in overly detailed or litigious correspondence. This behavioural change, along with the absence of a witness box and the benefits of a neutral setting such as a hotel, makes for a less aggressive, more conciliatory process.

Toby Hales, partner and head of the family team at HJA says: “It is clear that the court system just doesn’t work for middle income families. The impact of the delays and legal fees associated with agreeing a financial settlement in divorces takes its toll both financially and emotionally and can lead to hardship, particularly for those with large mortgages who have to take on the additional burden of privately rented accommodation on top of their existing outgoings.

“We have developed a practical solution that is both swift and economically predictable. For ‘Mr and Mrs Sensible’ who are not up for a court battle it is an alternative that provides access to a binding legal agreement with a fixed-fee and a time promise. As more solicitors sign up to offer this new model we are hopeful that this will create a sea-change in the way separation is handled and allow more people to access the right legal advice at what can be a very stressful time of their lives.”